HEERENVEEN (THE NETHERLANDS), 25 MARCH 2020. In light of the unforeseen and unprecedented impact of COVID-19 on economic activity and the markets we are operating in, and the uncertainty regarding the length and depth of the pandemic outbreak, the Board of Management of Accell Group has decided to withdraw the dividend proposal 2019 of EUR 0.30 per ordinary share and remove item 5.b from the Annual General Meeting (AGM) agenda.
The dividend withdrawal is part of a package of managerial measures taken to ensure business continuity for the coming period. The delay in component delivery from Asia combined with the effect of lockdowns, resulting in bike shop closures and a drop in demand across Europe, has caused us to proactively cut costs and manage for cash. This, in order to partly offset the anticipated very negative impact of the COVID-19 outbreak on our net turnover and profit in the first half of 2020. Typically, the first half year is for Accell Group and for the European bicycle industry as a whole the most important part of the year. As a consequence, we have now scaled down our bicycle production capacity with nearly 70%. So far, our Parts and Accessories business has not been affected.
We have drawn € 50 mln under the existing accordion facility to our term loan (increasing it to € 125 mln). Given the exceptional circumstances, we are in close and constructive contact with our syndicate banks to keep them informed of the impact of the pandemic on our business and financial position. We also intend to make full use of the various government relief measures in all relevant countries.
Furthermore, Accell Group intends to proceed with its Annual General Meeting (AGM) on 22 April 2020 as scheduled. However, in view of health and safety issues for everyone involved with the AGM and the ban on group gatherings as issued by the Dutch government, we strongly encourage shareholders not to attend this AGM in person but to follow it through our live webcast and to exercise their voting rights by giving a proxy. Further details can be found on our corporate website www.accell-group.com.
We will continue to closely monitor the situation and advise shareholders to regularly check our website for any further updates regarding the AGM.